Real Estate – Real Estate & Construction Lawhttps://www.csrealconblog.com
Tue, 19 Feb 2019 17:06:54 +0000en-UShourly1https://wordpress.org/?v=4.9.10https://realestateandconstructionlawmonitor.lexblogplatform.com/wp-content/uploads/sites/53/2016/04/cropped-favicon-10.46.56-AM-32x32.pngReal Estate – Real Estate & Construction Lawhttps://www.csrealconblog.com
3232New Jersey Court Rejects Zoning Board’s Issuance of a Variance That Discriminates Against Tenantshttps://www.csrealconblog.com/2019/02/articles/construction/land-use-and-development/new-jersey-court-rejects-zoning-boards-issuance-variance-discriminates-tenants/
https://www.csrealconblog.com/2019/02/articles/construction/land-use-and-development/new-jersey-court-rejects-zoning-boards-issuance-variance-discriminates-tenants/#respondTue, 19 Feb 2019 17:06:30 +0000https://www.csrealconblog.com/?p=2024The Appellate Division has once again confirmed that “distinctions between renters or property owners in the application of zoning and land use laws have no place in the application of legitimate objectives of zoning.”

In Tirpak v. Bor. of Point Pleasant Beach, A-5088-17T1/A-5147-17T1, decided Feb. 11, 2019, the property owner sought to remove a deed restriction imposed as a condition in connection with an earlier use variance. The restriction allowed for the use of the property as a two-family residence only if one of the units was owner-occupied. The trial court vacated the condition after finding it legally impermissible and the municipality subsequently challenged that determination.

On appeal, the court confirmed that it was improper for the zoning board to condition its grant of a use variance on whether the residence was occupied by an owner or tenants. In so doing, the court recognized the well-established principle that while zoning may be utilized to regulate the usage of property it cannot be applied to control the identity or status of the persons occupying the land. SeeDeFelice v. Point Pleasant Beach Bd. Of Adj., 216 N.J. Super. 377 (App. Div 1987) and United Property Owners Ass’n of Belmar v. Borough of Belmar, 185 N.J. Super. 163, 165 (App Div. 1982)). While the Zoning Board argued that the condition furthered the legitimate objectives of controlling noise and nuisance conditions, the court held that such objectives must be achieved through the police powers of the municipality, not its zoning laws.

In sum, a municipality may not employ its zoning laws in a manner that favors property owners and discriminates against tenants.

]]>https://www.csrealconblog.com/2019/02/articles/construction/land-use-and-development/new-jersey-court-rejects-zoning-boards-issuance-variance-discriminates-tenants/feed/0The Local Property Tax Appeal Filing Deadline Remains Inviolate and Cannot be Circumvented by Use of the Intervention Toolhttps://www.csrealconblog.com/2019/01/articles/real-estate/tax/local-property-tax-appeal-filing-deadline-remains-inviolate-cannot-circumvented-use-intervention-tool/
https://www.csrealconblog.com/2019/01/articles/real-estate/tax/local-property-tax-appeal-filing-deadline-remains-inviolate-cannot-circumvented-use-intervention-tool/#respondWed, 16 Jan 2019 16:45:21 +0000https://www.csrealconblog.com/?p=2007In Farmland Dairies, Inc. v. Borough of Wallington, N.J. Super. App. Div. (per curiam) (unpublished decision) (35-2-7909), the Appellate Division upheld the decision of the Tax Court in denying an unrelated neighboring property owner’s efforts at intervening in a pending local property tax appeal between the property owner and the Borough. The court concluded that the intervention application of the putative intervenor was out of time and barred by the statute of limitations. Although all residents of municipalities have standing and maintain the right to pursue tax appeals as “aggrieved” parties under the statute, including those related to their neighbor’s properties, any such contests must nonetheless comply with the statutory filing deadline.

The New Jersey Supreme Court has consistently recognized the necessity of complying with filing deadlines in the area of taxation. The statutory scheme establishing the court’s jurisdiction in this area is “one with which continuing strict and unerring compliance must be observed.” SeeMcMahon v. City of Newark, 195 N.J. 526, 546 (2008). Indeed, our Supreme Court has declared that the “failure to file a timely appeal is a fatal jurisdictional defect.” F.M.C. Stores v. Borough of Morris Plains, 100 N.J. 418, 425 (1985). The Supreme Court has also explained that strict adherence to statutory filing deadlines is of particular concern in tax matters, given “the exigencies of taxation and the administration of local government.” F.M.C. Stores, 100 N.J. at 424. The Legislature “has attempted to set out a well-organized time-table for the purpose of enabling a municipality to ascertain the amount of taxable ratables within the jurisdiction in order that it might adopt a responsible and fairly accurate budget.” Id. at 425. “By incorporating a strict deadline in [the statute], the Legislature intended to ensure that municipalities receive timely notice that a particular property’s valuation is subject to challenge.” Prime Accounting Dept. v. Township of Carney’s Point, 2013 N.J. Lexis at *31.

After previously remanding the matter to the Tax Court for further proceedings concerning the timeliness and propriety of the putative intervenor’s application for permissive intervention, the Appellate Division made it plain, mindful of the above-referenced well-settled jurisprudence, that any effort to intervene must, in the first instance, be timely pursued and that the annual tax appeal filing deadline will effectively wait for no one.

Although as demonstrated above, the inviolate nature of this statutory deadline is plain, the court’s decision here may have been made easier by the attendant distasteful nature of a case involving an unrelated party’s efforts at meddling with pending litigation between the real parties in interest (the actual owner of the property in question and the municipality).

]]>https://www.csrealconblog.com/2019/01/articles/real-estate/tax/local-property-tax-appeal-filing-deadline-remains-inviolate-cannot-circumvented-use-intervention-tool/feed/02019 Real Property Tax Review: Being Proactive with Your Assessment is Especially Critical in an Upward Trending Markethttps://www.csrealconblog.com/2019/01/articles/real-estate/tax/2019-real-property-tax-review-proactive-assessment-especially-critical-upward-trending-market/
https://www.csrealconblog.com/2019/01/articles/real-estate/tax/2019-real-property-tax-review-proactive-assessment-especially-critical-upward-trending-market/#respondWed, 16 Jan 2019 13:14:42 +0000https://www.csrealconblog.com/?p=2004In a market where economic indicators continue to show encouraging signs (e.g., decreasing vacancy conditions across market segments, improved employment numbers and rental rates, and continuing low levels of inflation), the prospect for property value appreciation exists. Because of questionable municipal assessment practices, often blindly motivated by the objective of maximizing tax ratables, careful scrutiny of assessments, especially in changing market conditions, is warranted. Consequently, it behooves commercial property owners to review their property tax assessments with their professionals now to ensure that their assessments are in line with present values and to verify that they are not paying more than their fair share of taxes. At the same time the potential exists that a successful appeal can work to lock in assessments at current property values, even in the face of possible increasing values.

Because New Jersey law provides for a “Freezing” of assessments for a period of two additional years, beyond any successful year appealed, the tax appeal vehicle has positive effects reaching into the future as well. In fact, because assessments are generally not modified until a town-wide revaluation or reassessment program is implemented (usually every 5-10 years), there is a real prospect that a lower assessment achieved as a result of a successful appeal could actually remain in place for well beyond the statutorily guaranteed two year “Freeze” period.

As a result, we believe that there continues to be substantial opportunities for property owners to realize significant tax savings and lock in current values for the foreseeable future. We therefore encourage commercial property owners (whether owners of office, industrial, manufacturing, hotel, multi-family and/or other special purpose properties) to discuss options for a tax appeal with counsel having expertise in this specialized practice area. In addition, those property owners who may benefit from statutory tax exemptions relating to non-profit, institutional or religious organization owner/users should similarly be reviewing with counsel whether all benefits available to them are being realized.

Because the 2019 tax appeal filing deadline is rapidly approaching (April 1, 2019, or May 1, 2019 in the case of a town-wide reassessment or revaluation) now is the appropriate time to take action.

]]>https://www.csrealconblog.com/2019/01/articles/real-estate/tax/2019-real-property-tax-review-proactive-assessment-especially-critical-upward-trending-market/feed/0Excess or Primary Insurance? Make Sure Your Contract Specifies.https://www.csrealconblog.com/2019/01/articles/real-estate/insurance/excess-primary-insurance-make-sure-contract-specifies/
https://www.csrealconblog.com/2019/01/articles/real-estate/insurance/excess-primary-insurance-make-sure-contract-specifies/#respondWed, 02 Jan 2019 15:45:08 +0000https://www.csrealconblog.com/?p=1999A New Jersey appellate court ruled in Lopez v. Palin Enterprises, Associated, No. A-0886-17T4 (N.J. App. Div. December 5, 2018) that a tenant’s insurance policy was not the primary coverage for an injury to its employee which occurred within its leased premises.

The defendant in the case, Palin Enterprises, Associated (“Palin”) owned a commercial building and leased a portion of it to Agile Trade-Show Furnishings, Inc. (“Agile”). Agile employed the plaintiff, Teodoro Lopez (“Lopez”). Lopez was injured using a freight elevator located within the leased premises and sued Palin for damages. Palin tendered the defense to Agile’s insurance company, Wausau Insurance (“Wausau”), arguing that the Wausau policy was the primary insurance coverage for Lopez’s claim. Palin was named as an additional insured under the Wausau policy. The Wausau policy provided “[t]his insurance shall be excess over any other insurance available to the additional insured whether such insurance is on an excess, contingent or primary basis, unless you are obligated under a written agreement to provide liability insurance for that additional insured on any other basis. In that event, this policy will apply solely on the basis required by such written agreement.”

The lease between Palin and Agile required Agile to procure “a comprehensive policy of liability insurance protecting [Palin] . . . against any liability whatsoever, occasioned by any occurrence on or about the Demised Premises.” The lease did not require such policy to be the primary liability coverage for such occurrences. The Court found that Wausau was not required to defend the Lopez lawsuit as its coverage is not to all claims, only as to all liability. The Court ruled that due to the failure of the lease to specify that Agile’s liability insurance policy must be primary, per the terms of the Wausau policy it provides excess coverage and Palin’s liability insurance policy provides the primary coverage.

This case underscores the necessity of carefully drafting indemnity and insurance provisions in contracts to properly allocate risks between the parties thereto, specify the types of insurance each party must carry to cover such risks, and designate the insurance which is primary or excess.

]]>https://www.csrealconblog.com/2019/01/articles/real-estate/insurance/excess-primary-insurance-make-sure-contract-specifies/feed/0Attorney’s Fees And Homeowner Claims Against Insurance Companieshttps://www.csrealconblog.com/2018/10/articles/real-estate/attorneys-fees-homeowner-claims-insurance-companies/
https://www.csrealconblog.com/2018/10/articles/real-estate/attorneys-fees-homeowner-claims-insurance-companies/#respondMon, 15 Oct 2018 17:55:58 +0000https://www.csrealconblog.com/?p=1998Lawsuits by homeowners against their own insurance companies for failing to pay on damage claims that homeowners believe and argue are covered by their policies of insurance are quite common in Florida. Frequently these involve claims for water-related damages—a typical example being a slow leak from piping in a kitchen or bathroom sink that is unknown to the homeowner but that occurs over an extended period of time and that ultimately causes damage to adjoining cabinets or perhaps even flooring. As a plumber who came to inspect such damage in my own house once remarked, when I asked him what all this meant, “Water has to go somewhere.”

A homeowner’s insurance policy is, in its most basic form, a contract of insurance. Each party to any contract has certain rights, duties and obligations under the contract. If a party breaches his or her contractual obligations, the other party may have a claim for damages. Under these circumstances, while other claims may exist, the homeowner’s primary claim against her own insurance carrier, resulting from the carrier’s refusal or failure to pay for damages that the homeowner maintains are covered by her insurance policy, is a claim for breach of contract.

From a homeowner’s perspective, one of the advantages that perhaps minimizes the risk of a lawsuit against her own insurance company is the one-way attorney’s fee provision set forth in Florida Statutes Sec. 627.428. Subsection (1) of this statute provides:

Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.

Thus, if a homeowner sues her insurance company for failing to pay for a loss that the homeowner feels is covered by her policy and wins that lawsuit, she will be awarded her reasonable attorney’s fees. If, however, the homeowner loses that lawsuit, she will not be required to pay the company’s attorney’s fees. That is why Florida Statutes Sec. 627.428 is a one-way attorney’s fee statute.

If attorney’s fees are awarded, those fees become part of the actual judgment under subsection (3) of Florida Statutes Sec. 627.428. In addition, if an appeal is filed and the homeowner prevails in that appeal, the attorney’s fees associated with the appeal are recoverable.

]]>https://www.csrealconblog.com/2018/10/articles/real-estate/attorneys-fees-homeowner-claims-insurance-companies/feed/0Residential Properties that are Not Religious Parsonages May Still Qualify For Tax Exemptionhttps://www.csrealconblog.com/2018/08/articles/real-estate/residential-properties-not-religious-parsonages-may-still-qualify-tax-exemption/
https://www.csrealconblog.com/2018/08/articles/real-estate/residential-properties-not-religious-parsonages-may-still-qualify-tax-exemption/#respondMon, 27 Aug 2018 19:29:59 +0000https://www.csrealconblog.com/?p=1992In today’s tax dollar hungry environment, municipalities are consistently searching for ways to increase their ratable base and in this regard are viewing tax exemption claims even more critically. Real property tax exemptions are a creature of statute and run against the Constitutional mandate that all property is to be taxed uniformly, with all property owners required to shoulder their fair share of the local property tax burden. As such, these exemptions are to be strictly construed and it is the burden of the applicant to prove entitlement to the exemption. Abunda Life Church of Body, Mind & Spirit v. Asbury Park City, 18 N.J. Tax 483, 485 (1999) and Teaneck v. Lutheran Bible Inst., 20 N.J. 86, 90 (1955).

In a recently decided case, the New Jersey Tax Court held that although the municipality may have been correct in rejecting an exemption on the grounds that the property did not constitute a religious parsonage, it erred in denying the exemption as the property was deemed to be essential to the religious use and actually used in conjunction with the religious operations. Mikvah Association v. Township of Teaneck, Docket Nos 015784-2014; 012594-2105; 010909-2016; and 012807-2017.

[A]ll buildings actually used in the work of associations and corporations organized exclusively for religious purposes, including religious worship, or charitable purposes, provided that if any portion of a building used for that purpose is leased to a profit-making organization or is otherwise used for purposes which are not themselves exempt from taxation, that portion shall be subject to taxation and the remaining portion shall be exempt from taxation … the buildings, not exceeding two, actually occupied as a parsonage by the officiating clergymen of any religious corporation of this State, together with the accessory buildings located on the same premises; the land whereon any of the buildings hereinbefore mentioned are erected, and which may be necessary for the fair enjoyment thereof, and which is devoted to the purposes above mentioned and to no other purpose and does not exceed five acres in extent ….

In Mikvah, the Tax Court rejected the availability of an exemption under the “parsonage” provision holding that the resident of the home, who was responsible for supervising the mikvah, did not qualify as an “officiating clergyperson.” There the court found that the resident in question did not perform the expected duties of an officiating clergyperson in the context of the Jewish faith in that she did not perform such critical “officiating” tasks as teaching, leading, participating in religious services, providing sermons, or officiating at Congregation weddings, funerals and bar mitzvahs. See City of Long Branch v. Ohel Yaacob Congregation, 20 N.J. Tax 511, 519 (2003).

Even though the court precluded exemption under the parsonage provision, it nonetheless found exemption of the residential structure to be appropriate in this instance because the resident of the property, which is located on the same street as the recognized exempt facility where religious bathing rituals are performed, was deemed to be the Ritual Director, responsible for maintenance and operation of the mikvah, and on call 24 hours a day, seven days a week.

Because the religious organization property owner required the resident of the property to be physically proximate to the mikvah and readily accessible to ritual participants, the court found her to be a necessity for the proper and efficient operation of the mikvah and not simply residing in the residence as a matter of convenience for the resident. Consequently, the Tax Court concluded that the residential property in which the Ritual Director resided with her family, was “actually used” in the operation of the mikvah and qualified for exemption pursuant to N.J.S.A. 54:4-3.6

]]>https://www.csrealconblog.com/2018/08/articles/real-estate/residential-properties-not-religious-parsonages-may-still-qualify-tax-exemption/feed/0New Jersey Opportunity Zones Provide Incentives to Investorshttps://www.csrealconblog.com/2018/07/articles/construction/land-use-and-development/new-jersey-opportunity-zones-provide-incentives-investors/
https://www.csrealconblog.com/2018/07/articles/construction/land-use-and-development/new-jersey-opportunity-zones-provide-incentives-investors/#respondThu, 19 Jul 2018 19:01:40 +0000https://www.csrealconblog.com/?p=1966The Opportunity Zone program enacted as part of the 2017 federal Tax Cuts and Jobs Act is designed to spark long-term capital investment into low-income and urban communities. The 169 Opportunity Zones (or tracts) designated in New Jersey by Governor Murphy are a complete game changer and contain attractive investment incentives for developers and investors.

Via the Opportunity Zone program, developers and investors can tap into and reinvest their unrealized capital gains without paying capital gains for a period of time, if at all. For example, capital gains invested or reinvested in an Opportunity Fund will receive a step up in basis of 10 percent if held for at least five years and by an additional 5 percent if held for at least 7 years, excluding up to 15 percent of the original gain from taxation.

An even greater savings is realized if the investment in the Opportunity Fund is held for at least 10 years. The gain accrued while invested is permanently excluded from taxable income of capital gains upon the sale or exchange of the investment.

With these tax incentives in place, Senator Corey Booker (NJ) believes the barriers between communities and the capital needed to generate economic growth and opportunity will be broken down.

The Opportunity Zones were designated based on key economic indicators in certain neighborhoods and communities such as income, unemployment rate and property values but also consideration was given to accessibility to mass transit and the value of existing investments. The 169 tracts were approved by the US Department of the Treasury on April 9, 2018. You can view the interactive map of designated Opportunity Zones for New Jersey by clicking here.

]]>https://www.csrealconblog.com/2018/07/articles/construction/land-use-and-development/new-jersey-opportunity-zones-provide-incentives-investors/feed/0Appellate Ruling Impacts Availability of Yellowstone Injunctionshttps://www.csrealconblog.com/2018/02/articles/real-estate/appellate-ruling-impacts-availability-yellowstone-injunctions/
https://www.csrealconblog.com/2018/02/articles/real-estate/appellate-ruling-impacts-availability-yellowstone-injunctions/#respondWed, 14 Feb 2018 18:54:52 +0000https://www.csrealconblog.com/?p=1943The ability to obtain a “Yellowstone” injunction has long been a saving grace for commercial tenants faced with a disputed default under their lease. A recent decision of the New York State Appellate Division, however, could shift the balance of power in commercial landlord/tenant relationships.

Typically, when a landlord notifies a tenant of an alleged default, the notice provides an opportunity to cure, the timeframe for which can be anywhere from a few days to a month, based on the terms of the lease. If the default is not cured prior to expiration of the relevant time period, the lease and the tenant’s rights to the property can be terminated, which cannot be undone as a matter of law. If the tenant disputes the basis for the default and seeks a determination from the court, it is essentially impossible for the court to resolve the dispute before the cure period expires. In addition, the timeframes provided to cure alleged defaults offer little flexibility for a tenant to investigate the facts, come to a conclusion, and take corrective action. The Yellowstone injunction, so-named for the seminal case in which one was issued, is designed to protect tenants in these circumstances.

A Yellowstone enables a tenant to toll the expiration of the default notice until a determination is made as to whether a default exists and whether it is the tenant’s responsibility to cure. The threshold for granting a Yellowstone injunction is not a stringent one; the tenant need only show (1) it is a party to a commercial lease, (2) the tenant’s landlord has provided it with a notice alleging default, which provides a timeframe for the tenant to cure, (3) the expiration of the timeframe has not passed, and (4) if it is determined that a default exists, the tenant is ready, willing and able to cure the default. 159 MP Corp. v. Redbridge Bedford, LLC, No. 2015-01523 (N.Y. App. Div. Jan. 31, 2018).

This is a lower standard than what a party must typically demonstrate to obtain injunctive relief under New York law, making the issuance of Yellowstone injunction fairly commonplace in commercial lease disputes. This lower barrier to entry demonstrates New York’s longstanding public policy against the forfeiture of property interests. Vil. Ctr. for Care v Sligo Realty and Serv. Corp., 95 AD3d 219, 222 (1st Dept 2012). As with any contractual negotiation, the parties to a commercial lease can utilize their negotiating positions to preserve or waive certain legal rights. However, courts rarely enforce waivers of a right when the right is a matter of public policy, as the preservation of property rights by a Yellowstone injunction has long been held to be by the courts.

The recently decided case, 159 MP Corp. v. Redbridge Bedford, LLC, involved a commercial lease that included a provision whereby the tenant waived its right to declarative relief, e.g. the issuance of a Yellowstone injunction. The Appellate Division, Second Department affirmed the lower court’s ruling enforcing the waiver provision, on the basis that the Legislature had not enacted any legislation prohibiting such waivers. Absent such legislation, the court stated, the notion of barring the waiver of a right based on public policy “does violence to the notion that the parties are free to negotiate and fashion their contracts with terms to which they freely and voluntarily bind themselves.” This decision marks a departure from existing case law declaring such waivers void based on public policy. See Sligo Realty.

In light of this apparent conflict between the First and Second Departments, which govern the five boroughs of New York City and surrounding counties, this issue appears ripe for appeal to New York’s highest court, the Court of Appeals. In the 159 MP Corp. case, the tenant must make a motion for leave to appeal to the Court of Appeals, and the Court can then exercise its discretion in granting or denying such a motion. The Court of Appeals may very well view the discrepancy between these neighboring courts as too divergent to remain unreconciled, and hear a further appeal. The decision on such an appeal would then provide guidance on the issue statewide.

Until then, however, New York commercial landlords should consider including provisions waiving a tenant’s right to declaratory relief in their commercial leases, whether the property is located in the Second Department (Kings (Brooklyn), Queens, Richmond (Staten Island), Nassau, Suffolk, Westchester, Rockland, Putnam, and Orange counties) or not. Tenants, on the other hand, should take the Second Department’s decision into account when considering their negotiating positions and, if their lease contains a waiver of Yellowstone rights, determining how to respond to a notice of default. Landlords and tenants should consult with their legal counsel so as to stay abreast of such developments of the law, including the rights the courts can be relied on to protect and, more importantly, the rights they will not.

]]>https://www.csrealconblog.com/2018/02/articles/real-estate/appellate-ruling-impacts-availability-yellowstone-injunctions/feed/0NYC Property Owners: Neighbors Who Are Renovating Might Use Your Property For Free.https://www.csrealconblog.com/2017/12/articles/construction/nyc-property-owners-neighbors-renovating-might-use-property-free/
https://www.csrealconblog.com/2017/12/articles/construction/nyc-property-owners-neighbors-renovating-might-use-property-free/#respondMon, 11 Dec 2017 14:13:13 +0000https://www.csrealconblog.com/?p=1938The New York City Building Code, Chapter 33, requires a developer to safeguard adjoining property during the conduct of all construction and demolition operations. Accordingly, a developer and an adjoining property owner may enter into a license agreement, whereby the adjoining property owner provides the developer with access to its property to install Code-required protections. In return, oftentimes the developer, among other things, pays compensation to the adjoining property owner for such access. If the parties cannot reach an agreement, the developer may seek to compel such access through the courts pursuant to Section 881 of the Real Property Actions and Proceedings Law.

While the Building Code does not explicitly provide a right to compensation, when these issues have been brought before them, New York courts have awarded compensation to adjoining property owners. However, whether compensation is mandated and the amount of compensation is within the courts’ discretion. Courts often consider the length of time for which access is necessary and the intrusiveness of the developer’s work on the use and enjoyment of the adjoining property by its owner and occupants. Without clear guidance from the courts, a developer and an adjoining property owner need to give due consideration to the issue of compensation as illustrated below.

In her ruling released late last month, Manhattan Judge Arlene Bluth denied any license fee to the Condominium Board of the Fifth Avenue Tower, an adjoining property owner to the New York Public Library. The Library will conduct a $200 million overhaul of its main Fifth Avenue branch. In her decision, Judge Bluth specifically rejected the Condominium Board’s request for a $15,000 / month license fee. It has been separately reported that the Condominium Board rejected the Library’s offer of a $3,500 / month license fee. It appears that Judge Bluth may have denied any license fee to the Condominium Board based, at least in part, on the excessiveness of its demands.

In view of the lack of clear guidelines, developers and adjoining property owners should consult with their legal counsel and should be sure not to overplay their hands when negotiating license fees.

]]>https://www.csrealconblog.com/2017/12/articles/construction/nyc-property-owners-neighbors-renovating-might-use-property-free/feed/0NYC Council Modifies Commercial Rent Taxhttps://www.csrealconblog.com/2017/12/articles/real-estate/nyc-council-modifies-commercial-rent-tax/
https://www.csrealconblog.com/2017/12/articles/real-estate/nyc-council-modifies-commercial-rent-tax/#respondTue, 05 Dec 2017 19:00:39 +0000https://www.csrealconblog.com/?p=1933The New York City Council approved a bill on Thursday, November 30, that impacts thousands of small business owners located south of 96th Street in Manhattan. The bill modifies the threshold that businesses must meet in order to be exempt from paying the 3.9 percent New York City commercial rent tax, which is imposed upon businesses located south of 96th Street in Manhattan. Businesses operating in the Bronx, Queens, Brooklyn and Staten Island are not subject to the tax and are not impacted by this legislation. Though Mayor Bill de Blasio initially opposed the bill as it is projected to remove $38.6 million in revenue in fiscal year 2019, it is expected that he will sign the bill into law. The measure also had the support of Council Speaker Melissa Mark-Viverito. Once signed, it will become effective July 1, 2018.

Prior to the bill’s passage, businesses who paid more than $250,000 a year in base rent were required to pay the tax. The bill will raise this threshold, allowing businesses who make $5 million or less in annual income and pay less than $500,000 in annual rent to be exempt from the tax. The bill also provides a partial, sliding credit for (1) businesses making $5 million or less a year and paying between $500,000 and $550,000 a year in rent and (2) businesses making between $5 million and $10 million a year and paying less than $550,000 in annual rent.

The bill also provides exemptions for not-for-profit organizations and businesses located in certain areas, such as the World Trade Center area or those areas impacted by the Lower Manhattan Commercial Revitalization Program.

A credit for businesses that pay between $250,000 and $300,000 in annual rent, without consideration of annual income, is left unchanged.